InfoSAWIT, JAKARTA — The Indonesian government welcomes the optimistic advancement in economic cooperation with the European Union following the achievement of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). This agreement opens significant opportunities for Indonesian palm oil exports to the European market with a 0% tariff or duty-free.
Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the negotiation process was quite tough, especially regarding palm oil issues. The European Union even threatened to implement the European Union Deforestation Regulation (EUDR), which was seen as potentially hindering exports of this key Indonesian commodity.
"Initially, they did not want to include palm oil at all, which is why the EUDR emerged. However, at the last minute, it became clear that they really needed palm oil. They agreed to provide a 0% tariff for palm oil," said Airlangga, quoted from the Investor Daily Round Table (IDR) 2025 event recently.
As part of the agreement, Indonesia will implement a quota rating system for products originating from the European Union. Meanwhile, for export products such as crude palm oil (CPO) and palm kernel oil (PKO), Indonesia will not impose import or export duties.
This trade arrangement will be conducted through the establishment of export quotas in certain amounts agreed upon together. The quota serves as a control tool to ensure that trade volumes remain aligned with national policies and prevent uncontrolled surges.
"There are EU companies that are also affiliated with Indonesia, so the provision of quotas is important. If the quota is exceeded, the tariff imposed is 3%, much lower than the previous 19%," explained Airlangga.
With the opening of market access through IEU-CEPA, Airlangga believes that concerns regarding the EUDR can be minimized. This agreement is seen as a diplomatic and economic breakthrough, simultaneously opening a new chapter in trade relations between Indonesia and the European Union.
"With this, the pressure from the EUDR becomes very low on our palm oil exports. So, we don't need to worry too much anymore. A big door has been opened through IEU-CEPA," concluded Airlangga.
The IEU-CEPA agreement is a breath of fresh air for the national palm oil industry, which has often received negative attention from the global market. The government hopes that this cooperation will not only increase export values but also strengthen Indonesia's bargaining position in the global supply chain based on sustainability. (T2)
